06 June 2025
The Board of Directors
Sarvodaya Development Finance PLC No. 51/A, Dr. Danister De Silva Mawatha Colombo 08
Dear Sirs/Mesdames,
Accountants' report for inclusion in the prospectus of Sarvodaya Development Finance PLC IntroductionThis report has been prepared for the inclusion in the prospectus issued in connection with the proposed issuance of Twenty Million (20,000,000) Tier 2 Listed Rated Unsecured Subordinated Redeemable High Yield Sustainable Bonds at rupees one hundred (LKR 100.00) to raise rupees two billion (LKR 2,000,000,000) by Sarvodaya Development Finance PLC (the "Company"). The tenor of the instrument will be 5 years and it is annually couponed. This instrument will be listed in the CSE and rated by Lanka Rating Agency. The proceeds of the proposed sustainability bonds will be used specifically for financing:
The development and implementation of rooftop solar electricity generation facilities, including dedicated transmission and supporting infrastructure.
Financing for solar equipment vendors and suppliers to strengthen the renewable energy supply chain.
Providing loan and affordable leasing facilities to support the purchase of electric vehicles (EVs).
Financing low-carbon public transportation infrastructure projects, such as EV charging centres.
Providing loans to underserved communities for affordable housing projects.
Offering financial services specialized for women entrepreneurs and women-led enterprises.
Providing loan facilities and affordable leasing options for agricultural equipment and machinery to support farmers.
Offering microfinance loans for low-income communities.
We have examined the financial statements of the Company for the financial years ended 31 March 2021 to 31 March 2025 ("period"), and report as follows.
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Incorporation
Sarvodaya Development Finance PLC is a limited liability company incorporated and domiciled in Sri Lanka in 2010. The registered office of the company and the principal place of business are situated at No. 51/A, Dr. Danister De Silva Mawatha, Colombo 8.
Sarvodaya Development Finance PLC offers a range of financial services to both individuals and businesses. These services encompass leasing, gold loans, term loans, as well as savings and deposits.
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Financial Information
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Five Year Summary of Audited Financial Statements
A summary of statement of profit and loss and other comprehensive income, statement of financial position, statement of cash flow and statement of changes in equity of the company for the financial year ended 31 March 2020 to 31 March 2025, based on the audited financial statements of the company is set out in Annexure 1.
Summaries presented for operating results, assets, liabilities and shareholders' fund for financial year ended 31 March 2021 to 31 March 2025 are based on the financial statement prepared in accordance with Sri Lanka Accounting Standards (SLFRS/LKAS), effective from 1 January 2012 in the annual reports of the respective years.
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Audit Reports
We have only audited the financial statements of the company for the year ended 31 March 2025 and previous four years financial statements for 31 March 2021 to 31 March 2024 were audited by the predecessor auditor Ernst and Young Sri Lanka.
Unqualified audit opinions have been issued for the said financial years by audit reports dated 14 July 2021, 31 May 2022, 29 May 2023, 31 May 2024, and 2 June 2025 respectively.
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Application of Accounting Standards and Accounting Policies
The financial statements of the company for the years ended 31 March 2021 to 31 March 2025 comply with Sri Lanka Accounting Standards (commonly referred as "SLFRS"/"LKAS") laid down by the Institute of Chartered Accountant of Sri Lanka (CA Sri Lanka) and comply with the requirements of Companies Act No 7 of 2007.
The accounting policies and changes in the accounting policies of the company are stated in detail in the audited financial statements of the company for the years ended 31 March 2021 to 31 March 2025.
The adoption of revised/ new accounting standards and a summary of related amendments to the accounting policies of the company for the financial years ended 31 March 2021 to 31 March 2025 are set out in Annexure 2.
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Dividends
The company has paid the following dividends in respect of ordinary shares for the year ended 31 March 2021 to 31 March 2025.
Year/Period Ended
Dividend Paid (Rs. Mn)
Dividend Declared Per Share
31 March 2025
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31 March 2024
97.23
0.65
31 March 2023
112.20
0.75
31 March 2022
-Final dividend
74.79
0.50
-Interim dividend
74.79
0.50
31 March 2021
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- Restriction on Use
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Five Year Summary of Audited Financial Statements
This report is made solely for the purpose of the Board of Directors of Sarvodaya Development Finance PLC for the inclusion in the prospectus issued in connection with the proposed issue of sustainability bond. .
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the addressee, for our audit work for the year ended 31 March 2025, for the report, or for the opinion we have formed for the financial statements for the year ended 31 March 2025. This report should not be used, circulated, quoted, or otherwise referred to any other purpose.
Yours faithfully,
Deloitte Associates Chartered Accountants Colombo
06 June 2025
Statements of Profit or Loss For the year ended 31 March2025 | 2024 | 2023 | 2022 | 2021 | |
Interest income | 4,063,784,067 | 3,101,982,284 | 2,461,331,443 | 1,822,315,188 | 1,584,744,640 |
Interest expenses | (1,424,294,944) | (1,322,454,402) | (1,221,614,731) | (562,116,108) | (623,347,022) |
Net Interest Income | 2,639,489,123 | 1,779,527,882 | 1,239,716,712 | 1,260,199,080 | 961,397,618 |
Non-Interest Income | 310,610,902 | 224,791,311 | 136,160,511 | 108,094,089 | 158,794,565 |
Impairment charges for loans and other losses | (438,903,833) | (332,531,900) | (63,092,109) | (192,618,588) | (60,091,862) |
Total operating expenses | (1,372,015,880) | (1,080,570,958) | (866,708,145) | (800,411,042) | (703,903,250) |
Operating Profit before Taxes on Financial Services | 1,139,180,311 | 591,216,335 | 446,076,970 | 375,263,540 | 356,197,071 |
Operating Profit after Taxes on Financial Services | 829,600,053 | 409,260,182 | 300,131,895 | 268,710,633 | 266,834,766 |
Profit before Taxation from Operations | |||||
Profit for the year | 473,812,931 | 249,596,654 | 221,649,449 | 215,466,246 | 183,356,743 |
This is the extraction of Audited Financial Statements covering a period of five years
Statement of Financial Position As at 31 March
2025 | 2024 | 2023 | 2022 | 2021 | |
Assets | |||||
Cash and cash equivalents | 927,665,722 | 544,919,606 | 664,043,703 | 92,132,395 | 130,870,989 |
Financial Investments | 906,304,991 | 772,478,191 | 576,027,374 | 532,667,038 | 374,591,188 |
Other Financial Assets | 459,810,771 | 50,960,718 | 874,494 | 814,391 | 779,506 |
Financial Assets at Amortised Cost - Loans and Receivables | 12,322,099,025 | 6,958,212,710 | 5,105,311,168 | 5,110,595,093 | 4,954,331,169 |
Financial Assets at Amortised Cost - Lease Rentals Receivables | 6,860,059,251 | 5,616,318,355 | 4,674,862,363 | 4,768,166,996 | 2,952,368,025 |
Other Non Financial Assets | 276,583,187 | 238,195,920 | 155,939,726 | 162,122,503 | 99,226,178 |
Investment Property | 246,710,000 | 246,710,000 | 234,257,500 | 234,257,500 | 215,678,750 |
Property, Plant and Equipment | 271,420,091 | 224,485,283 | 147,095,459 | 139,267,592 | 160,884,369 |
Right-of-use Lease Assets | 227,819,115 | 185,152,504 | 105,241,220 | 129,533,191 | 142,812,343 |
Intangible Assets | 1,080,000 | 4,176,618 | 4,686,053 | 4,927,786 | 5,055,287 |
Deferred Tax Assets | 42,374,071 | 56,237,769 | 1,954,498 | - | - |
Total Assets 22,541,926,224 14,897,847,674 11,670,293,558 11,174,484,484 9,036,597,804
Liabilities | |||||
Due to Banks and Other Institutions | 7,565,769,379 | 3,005,408,260 | 1,508,114,678 | 2,320,184,829 | 1,729,624,109 |
Financial Liability at Amortised Cost - Due to Customers | 9,832,710,440 | 7,492,005,969 | 6,193,431,026 | 4,729,097,119 | 4,551,945,183 |
Lease Liability | 249,451,675 | 202,487,184 | 119,947,887 | 149,951,692 | 161,198,954 |
Other Non Financial Liabilities | 724,704,208 | 425,290,696 | 291,925,223 | 596,809,388 | 282,552,100 |
Current Tax Liabilities | 154,998,448 | 144,945,144 | 71,709,569 | 21,170,445 | 53,665,325 |
Post Employment Benefit Obligation | 70,333,157 | 56,992,064 | 35,677,457 | 32,066,158 | 55,828,613 |
Deferred Tax Liabilities | - | - | - | 20,409,737 | 20,398,293 |
Total Liabilities 18,597,967,307 11,327,129,316 8,220,805,840 7,869,689,368 6,855,212,578
Shareholders' Funds | |||||
Stated capital | 2,696,113,032 | 2,696,113,032 | 2,696,113,032 | 2,696,113,032 | 1,696,113,020 |
Reserves | 218,618,500 | 194,927,853 | 182,448,021 | 171,365,549 | 160,592,236 |
Retained earnings | 1,029,227,385 | 679,677,472 | 570,926,665 | 437,316,534 | 324,679,970 |
Total Equity Attributable to Equity Holders of the Company | 3,943,958,917 | 3,570,718,357 | 3,449,487,718 | 3,304,795,115 | 2,181,385,226 |
Total Liabilities and Shareholders' Funds 22,541,926,224 14,897,847,674 11,670,293,558 11,174,484,484 9,036,597,804
Contingent liabilities and commitments 20,317,100 6,048,100 7,433,330 4,290,100 7,689,916
Certification
This is the extraction of audited Financial Statements covering a period of five years.
Statements of Changes in Equity for the year ended 31st March2025 | 2024 | 2023 | 2022 | 2021 | |
Balance as at the beginning of the year | 3,570,718,357 | 3,449,487,718 | 3,304,795,115 | 2,181,385,226 | 1,195,679,265 |
Profit for the year | 473,812,931 | 249,596,654 | 221,649,449 | 215,466,246 | 183,356,743 |
Other Comprehensive Income | (3,334,937) | (16,168,977) | (2,158,820) | 31,788,904 | (1,787,809) |
Transfer to Statutory Reserves Fund | - | - | - | - | |
Share Issue | - | - | 1,000,000,012 | 806,113,000 | |
Expenses related to the Share Issue | - | - | (49,047,249) | (1,975,974) | |
Interim Dividend | - | (74,798,026) | (74,798,026) | - | |
Final dividend | (97,237,434) | (112,197,039) | - | - | - |
Balances as at the end of the year | 3,943,958,917 | 3,570,718,357 | 3,449,487,718 | 3,304,795,115 | 2,181,385,226 |
Statements of Cash Flows For the year ended 31 March
2025 | 2024 | 2023 | 2022 | 2021 | |
Cash Flows From / (Used in) Operating Activities | |||||
Profit before Income Tax Expense | 829,600,053 | 409,260,182 | 300,131,895 | 268,710,633 | 266,834,766 |
Adjustments for; | |||||
Impairment Charges for Loans / Lease Rental and Other Receiva | 438,903,833 | 332,531,900 | 63,092,109 | 192,618,588 | 50,884,654 |
Changing Fare Value of Investment Property | - | (12,452,500) | - | (18,578,750) | (89,584,250) |
Reversal of Provision of Loan Risk Assurance Benefit Fund | - | - | - | - | |
Loss/(Profit) on Disposal of Property, Plant and Equipment | (239,401) | (8,287,416) | 3,601,501 | 1,744,069 | (267,857) |
Profit/(Loss) on ROU assets | (635,124) | (671,152) | 31,067 | (672,002) | - |
Provision for Defined Benefit Plans | 17,447,047 | 12,579,736 | 10,021,516 | 20,456,300 | 12,491,938 |
Depreciation of Property, Plant and Equipment | 46,980,467 | 35,974,055 | 29,034,587 | 33,428,444 | 37,102,566 |
Amortisation of Intangible Assets | 3,096,618 | 509,435 | 1,164,233 | 2,947,501 | 10,055,835 |
Amortisation of Right to Use Assets | 93,152,274 | 80,014,671 | 70,140,299 | 64,393,112 | 62,944,563 |
Interest Expenses on Lease Creditor | 33,583,789 | 30,331,731 | 17,758,693 | 18,005,565 | 23,920,090 |
Operating Profit before Working Capital Changes | 1,461,889,556 | 879,790,640 | 494,975,900 | 583,053,459 | 374,382,306 |
(Increase)/Decrease in Loans and Receivables | (5,578,637,759) | (1,976,585,950) | 125,563,957 | (173,355,281) | 233,886,268 |
(Increase)/Decrease in Lease Rentals Receivables | (1,466,152,207) | (1,136,412,727) | (92,482,507) | (1,983,759,093) | (1,257,917,674) |
(Increase)/Decrease in Other Financial Assets | (408,850,053) | (50,086,224) | (60,103) | (34,885) | 163,756,160 |
(Increase)/Decrease in Other Non Financial Assets | (46,228,968) | (82,549,694) | 8,597,776 | (70,463,433) | 42,817,778 |
Increase/(Decrease) in Amounts Due to Customers | 2,340,704,471 | 1,298,574,943 | 1,464,333,905 | 177,151,935 | (550,030,770) |
Increase/(Decrease) in Other Non Financial Liabilities | 298,050,075 | 133,182,415 | (230,546,093) | 239,354,827 | 183,374,104 |
Cash Generated from Operation | (3,399,224,884) | (934,086,597) | 1,770,382,834 | (1,228,052,469) | (809,731,828) |
Retirement Benefit Liabilities Paid | (8,870,150) | (14,363,667) | (9,494,245) | (8,095,000) | (10,818,721) |
Net Collection of LRAB Fund | (245,216) | - | 123,525 | 104,435 | (42,591) |
Income Tax Paid | (330,440,861) | (133,781,663) | (49,382,348) | (90,062,673) | (26,665,820) |
Repayment of Lease Liability | - | (101,931,772) | (93,525,230) | (79,694,785) | (70,768,771) |
Net Cash From/(Used in) Operating Activities | (3,738,781,111) | (1,184,163,699) | 1,618,104,536 | (1,405,800,491) | (918,027,731) |
Cash Flows from / (Used in) Investing Activities | |||||
Sales of Property, Plant and Equipment | (518,169) | (9,264,831) | 402,068 | 274,301 | 494,697 |
Acquisition of Property, Plant and Equipment | (94,194,044) | (114,341,293) | (40,865,923) | (13,830,036) | (33,895,737) |
Acquisition of Intangible Assets | - | - | (922,500) | (2,820,000) | - |
Financial Investment | (133,826,800) | (196,450,817) | (43,360,336) | (158,075,850) | 70,347,843 |
Dividend Paid | - | - | - | - | - |
Net Cash Flows from/(Used in) Investing Activities | (228,539,013) | (320,056,941) | (84,746,691) | (174,451,586) | 36,946,804 |
Cash Flows from / (Used in) Financing Activities | |||||
Funds received from bank and other institutional borrowings | 6,272,533,824 | 2,112,009,434 | 512,961,416 | 1,560,350,000 | 1,293,108,000 |
Repayment of bank and other institutional borrowings | (1,646,501,812) | (994,926,457) | (1,076,151,729) | (1,075,832,549) | (1,177,148,099) |
Funds Received from Share Issue | - | - | - | 1,000,000,012 | 806,113,000 |
Repayment of Lease Liability | (115,724,394) | ||||
Dividend Payment | (97,237,434) | (112,197,039) | (149,376,386) | - | - |
Expenses related to the Share Issue | - | - | - | (49,047,249) | (1,975,974) |
Net Cash Flows from/(Used in) Financing Activities | 4,413,070,184 | 1,004,885,938 | (712,566,699) | 1,435,470,215 | 920,096,928 |
Net increase/(decrease) in cash and cash equivalents | 445,750,060 | (499,334,702) | 820,791,146 | (144,781,862) | 39,016,000 |
Cash and Cash Equivalents at the beginning of the year | 80,336,436 | 579,671,138 | (241,120,008) | (96,338,146) | (135,354,147) |
Cash and Cash Equivalents at the end of the year | 526,086,496 | 80,336,436 | 579,671,138 | (241,120,008) | (96,338,146) |
A. Cash and Cash Equivalents at the end of the year | |||||
Favorable Cash & Cash Equivalents | 927,665,722 | 544,919,606 | 664,043,703 | 92,132,395 | 130,870,989 |
Unfavorable Cash & Cash Equivalents | (401,579,227) | (464,583,171) | (84,372,565) | (333,252,403) | (227,209,135) |
Total Cash and Cash Equivalents at the end of the year | 526,086,496 | 80,336,436 | 579,671,138 | (241,120,008) | (96,338,146) |
Note 1
Repayment of lease liability has been classified under 'Cash Flows from / (Used in) Financing Activities' in the 2025 annual report, whereas in previous years it was classified under 'Cash Generated from Operations'.
Sarvodaya Development Finance PLC Key Financial Ratios2024-25 | 2023-24 | 2022-23 | 2021-22 | 2020-21 | |
Debt / Equity Ratio (Times) | 4.41 | 2.93 | 2.23 | 2.13 | 2.88 |
Interest Cover Ratio (Times) | 1.72 | 1.45 | 1.37 | 1.67 | 1.57 |
Capital Adequacy - Core Capital Ratio % | 20.52% | 25.84% | 32.75% | 29.17% | 21.58% |
Capital Adequacy - Total Capital Ratio % | 20.64% | 26.00% | 34.01% | 30.42% | 21.80% |
Debt/ Equity Ratio = Total Debt / Total Equity
Interest Cover Ratio = Profit before Tax + Depreciation + Amortization + Impairment + Interest Expense / Interest Expense
Financial Year Accounting policy changes. Ended | |
31 March 2021 to 31 March 2025 | There were no material changes to accounting policies in the mentioned period that had a material impact on the financial statements. |